Mukesh Babu Financial Services

First of all a totally unknown stock and has no business per se apart from proprietary trading.

But at 28 cr market cap and 80% promoter holding something big is cooking here. Can be a multibagger

The company holds 16.5 crores worth of Gaekwar Mills Debentures and 9 crores worth of Platinum Square Debentures. This is in total 25.5 crores worth of debentures.

Gaekwar Mills is a defunct company holding around 11 acres or more. The development of land and conversion to equity of this debentures can give a very huge valuation.

The equity portfolio in its 52% subsidiary on cost is 6 cr which as per a quick valuation is 40cr. So adds another 20 odd crores.

They may also have some offices and some other Mutual Fund holdings.

Here in would like to have peoples view on how to value this company.

Disclosure : Have a decent position from 26-35

Great find Nooresh. Missed the bus as i did not want to expose myself to more companies in my portfolio. Surely a missed train gone by.

Ayush/Hitesh and seniors,

Can you please guide us on how to value such smaller companies where investments(debt and/or equity) are much more than double the m-cap (assuming insignificant business growth)

Along, similar lines there is a BSE listed co called Elegant marbles which has a MCAP of 16 crores and Investments valued at over 40 crores. Div yield of over 5%.

Pls advise.

Hi Atul,

Have worked on the holding co concept and was lucky to have made good returns in several ideas like CHI, Majestic etc. However got stuck in BNK Capital.

And my experience now is that there are usually value traps until n unless its a pure investment co with no investment in related cos. Also these ideas mostly work in bull markets when the underlying investments are doing very well.

So, I have started leaving out this space as lot of timing is needed to get good returns.


Hi Ayush,

The 25 crore bond holding is convertible to equity.

Land is 80 acres which will be developed.

The promoters have infused 25 cr in Gaekwar Mills with first 3 years of no interest and rest at 9-10% interest.

Majorly betting on the land development in next 1-2 years and conversion to equity.

Also at 2-2.5 cr dividend income with ease. So give a multiple of 10 times to it can justify a 25 cr market cap.

Its a high risk high return bet.

Disclosure : have exposure from 30-35 rs


Hello Nooresh,

can i buy small quantities of shares @ CMP ? I’m ready to wait for another 2 to 3 years